New Atlanta Fed President Expects Moderate Economic Growth in 1996

EMBARGOED UNTIL 1:05 P.M. March 11, 1996

ATLANTA--The national economy should remain on a moderate growth path of about 2 percent in 1996, according to Jack Guynn, the new president and chief executive officer of the Federal Reserve Bank of Atlanta.

In his first economic speech since becoming head of the Atlanta Fed, Guynn (pronounced "gwin") told the Atlanta Rotary Club today that inflation, as measured by the consumer price index, should continue to average between 2-1/2 percent and 3 percent. He also projected that unemployment would stay about the same as last year's annual average rate of 5.6 percent.

"One way to look at the overall picture is to say that the economy is moving forward without major impediments but also with somewhat less momentum than we experienced earlier in the recovery," he said.

Guynn said that capital spending would be the strongest component of the economy in 1996. He said that neither consumer spending nor net exports should be a drag on the economy this year, but that government purchases looked like they might be.

"All in all, this outlook portrays an economy with few imbalances and without worsening inflationary pressures," Guynn said.

In his regional outlook, he said the Southeast's economy also is entering a period of moderate and balanced growth, with Georgia and Florida being the states with the strongest economies. "In fact, although the region's growth may decelerate," he added,"we should continue to grow at a faster rate than the nation in terms of payroll employment, which has been true throughout the recovery from the 1990-91 recession."

At the end of his speech, Guynn outlined three public policy issues that he thinks are especially important: restructuring the banking industry through further regulatory reform, valuing and maintaining low inflation, and cutting the federal budget deficit.